Commission approves public financing of bus
transport in Malta

The European Commission today decided that payments
made by Malta to finance public transport on its territory do constitute State
aid but are compatible with the common market. Instead of signing public service
contracts, Malta had unilaterally imposed public service obligations on the bus
operators of the Public Transport Association. In exchange, it pays the
companies public service compensation.

Having received a complaint from Unscheduled Bus Services, an
association of bus companies operating occasional transport services, the
Commission examined the compensation granted by Malta in exchange for the public
service obligations it imposes on the companies belonging to the Public
Transport Association. It found that, based on criteria laid down by the
Court of Justice,[1] the
compensation comes under the State aid provisions of the Community competition
rules.

However, as the payments comply with the European rules on aid in the form of
compensation for public service obligations in the field of
transport,[2] the Commission
has decided to declare them compatible with the common market.

On the other hand, the Commission is not competent to express an opinion on
the public support paid to some transport companies to replace the vehicles in
their fleet and install an electronic ticketing system, as this was granted
before Malta joined the EU.

[1] These criteria were set
out in the ECJ judgment in the Altmark Trans case (24 July 2003). If they
are fulfilled, compensation for public service obligations cannot legally be
termed as State aid.

[2] See conditions in
Chapter IV of Regulation 1191/69/EC on action by Member States concerning the
obligations inherent in the concept of a public service in transport by rail,
road and inland waterway.